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Continuity and Change in Tanzania's Ruling Coalition

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Continuity and Change in Tanzania's Ruling Coalition DIIS WORKINGDIIS WORKING PAPER 20PAPER12:06 Continuity and change in Tanzania’s ruling coalition: legacies, crises and weak productive capacity Ole Therkildsen and France Bourgouin DIIS Working Paper 2012:06 WORKING PAPER WORKING 1 DIIS WORKING PAPER 2012:06 OLE THERKILDSEN Senior Researcher, [email protected] FRANCE BOURGOUIN Project Researcher, Ph.d. [email protected] ACKNOWLEDGEMENTS The authors wish to express their gratitude to Goran Hyden, Per Tidemand, Rasmus Hundsbæk Pedersen and Sam Wangwe for their insightful comments and criticisms during the process of writing this paper. We also like to thank the members of the EPP team for their contributions. The usual disclaimers apply. DIIS Working Papers make available DIIS researchers’ and DIIS project partners’ work in progress towards proper publishing. They may include important documentation which is not necessarily published elsewhere. DIIS Working Papers are published under the responsibility of the author alone. DIIS Working Papers should not be quoted without the express permission of the author. DIIS WORKING PAPER 2012:06 © The authors and DIIS, Copenhagen 2012 Danish Institute for International Studies, DIIS Strandgade 56, DK-1401 Copenhagen, Denmark Ph: +45 32 69 87 87 Fax: +45 32 69 87 00 E-mail: [email protected] Web: www.diis.dk Cover Design: Carsten Schiøler Layout: Allan Lind Jørgensen Printed in Denmark by Vesterkopi AS ISBN: 978-87-7605-490-8 Price: DKK 25.00 (VAT included) DIIS publications can be downloaded free of charge from www.diis.dk 2 DIIS WORKING PAPER 2012:06 DIIS WORKING PAPER SUB-SERIES ON ELITES, PRODUCTION AND POVERTY This working paper sub-series includes papers generated in relation to the research programme ‘Elites, Production and Poverty’. This collaborative research programme, launched in 2008, brings together research institutions and universities in Bangladesh, Denmark, Ghana, Mozam- bique, Tanzania and Uganda and is funded by the Danish Consultative Research Committee for Development Research. The Elites programme is coordinated by the Danish Institute for International Studies, Copenhagen, and runs until the end of 2011. Earlier papers in this subseries: Rweyemamu, Dennis: “Strategies for Growth and Poverty Reduction: Has Tanzania’s Second PRSP Influenced implementation?” DIIS Working Paper 2009:13. Kjaer, Anne Mette, and Fred Muhumuza: “The New Poverty Agenda in Uganda” DIIS Work- ing Paper 2009:14. Whitfield, Lindsay: “The new ‘New Powerty Agenda’ in Ghana: what impact?” DIIS Working Paper 2009:15. Webster, Neil, Zarina Rahman Khan, Abu Hossain Muhammad Ahsan, Akhter Hussain and Mahbubur Rahman: “State Elites and the New Poverty Agenda in Bangladesh”. DIIS Work- ing Paper 2009:22. Buur, Lars, with Obede Suarte Baloi: “The Mozambican PRSP Initiative: Moorings, usage and future” . DIIS Working Paper 2009:35. Whitfield, Lindsay: “Developing Technological Capabilities in Agro-Industry: Ghana’s ex- perience with fresh pineapple exports in comparative perspective”. DIIS Working Paper 2010:28. Whitfield, Lindsay: “How countries become rich and reduce poverty: A review of heterodox explanations of economic development”. DIIS Working Paper 2011:13. Whitfield, Lindsay and Ole Therkildsen: “What Drives States to Support the Development of Productive Sectors?”, DIIS Working Paper 2011:15. Buur, Lars and Lindsay Whitfield: “Engaging in productive sector development: Comparisons between Mozambique and Ghana,” DIIS Working Paper 2011:22. Whitfield, Lindsay: “Competitive Clientelism, Easy Financing and Weak Capitalists: The Con- temporary Political Settlement in Ghana”, DIIS Working Paper 2011:27. Whitfield, Lindsay: “Growth without Economic Transformation: Economic Impacts of Gha- na’s Political Settlement”, DIIS Working Paper 2011:28. Whitfield, Lindsay: “Political Challenges to Developing Non-Traditional Exports in Ghana: The Case of Horticulture Exports”, DIIS Working Paper 2011:29. Buur, Lars with Obede Baloi and Carlota Mondlane Tembe: “Mozambique Synthesis Analysis: Between Pockets of Efficiency and Elite Capture,” DIIS Working Paper 2012:01. Kjær, Anne Mette, Fred Muhumuza and Tom Mwebaze: “Coalition-driven initiatives in the Ugandan dairy sector: Elites, conflict, and bargaining”, DIIS Working Paper 2012:02. Kjær, Anne Mette, Fred Muhumuza, Tom Mwebaze, Mesharch Katusiimeh: “The political economy of the fisheries sector in Uganda: ruling elites, implementation costs and industry interests”, DIIS Working Paper 2012:04. Kjær, Anne Mette, Mesharch Katusiimeh, Tom Mwebaze and Fred Muhumuza: “When do rul- ing elites support productive sectors? Explaining policy initiatives in the fisheries and dairy sectors in Uganda”, DIIS Working Paper 2012:05. Kjær, Anne Mette and Mesharch Katusiimeh: “Growing but not transforming: Fragmented ruling coalitions and economic developments in Uganda”, DIIS Working Paper 2012:07. More information about the research and access to publications can be found on the website www.diis.dk/EPP or via the Q2 barcode 3 DIIS WORKING PAPER 2012:06 4 DIIS WORKING PAPER 2012:06 CONTENTS Abstract 7 1. Introduction 9 2. Present structure of the ruling coalition: party, bureaucracy, military 12 2.1 The CCM and its dominance 13 2.2 The bureaucracy 15 2.3 The military 16 2.4 Weak entrepreneurs 16 2.5 Conclusions 18 3. The subtle causes of coalition changes 18 3.1 Structural changes in the Tanzanian economy 18 3.2 The importance of education for elite formation 20 3.3 Conclusion 21 4. Crisis and changes in Tanzania’s ruling coalition over time 21 4.1 The roots of CCM dominance and its changes over time 22 4.2 The Bureaucracy 27 4.3 The Military 30 4.4 Emerging entrepreneurs 30 4.5 Conclusions 37 5. Resource use to stay in power 38 5.1 Taxes and aid 38 5.2 The Party 39 5.3 The bureaucracy 42 5.4 The military 44 5.5 Emerging entrepreneurs 44 5.6 Conclusions 47 6 Political stability without sustained economic development 47 References 50 5 DIIS WORKING PAPER 2012:06 LIST OF ABBREVIATIONS ACT Agricultural Council of Tanzania ASM Artisanal-scale mining BIS Basic Industry Strategy BoT Bank of Tanzania CC Central Committee CCM Chama Cha Mapinduzi CHADEMA Chama cha Maendeleo na Demokrasia CSO Civil society organisation CTI Confederation of Tanzanian Industries CUF Civil United Front DRD Domestic Revenue Department EPA External Payments Account EPP Elites, Production and Poverty research programme FDI foreign direct investments GDP Gross domestic product Golkar Partai Golongan Karya (Indonesia) IMF International Monetary Fund LSM Large-scale mining LTD Large taxpayer department MP Member of Parliament MVIWATA National Network of Smallholder Farmers NEC National Executive Committee NGO Non-governmental organization OECD Organisation for Economic Co-operation and Development SAP Structural Adjustment Programmes SOE State-owned enterprises STAMICO State Mining Corporation TANU Tanganyika African National Union TCCIA Tanzania Chamber of Commerce, Industry and Agriculture TCME Tanzania Chamber of Mines and Energy TNBC Tanzania National Business Council TPSF Tanzania Private Sector Foundation TRA Tanzania Revenue Authority 6 DIIS WORKING PAPER 2012:06 ABSTRACT This paper presents analyses of the current composition of Tanzania’s ruling coalition, comprised mainly of the ruling party (the CCM), the bureaucracy and the military, of how it has changed over time and of how its funding has evolved. Specifically, it discusses how historical legacies, structural changes in the economy and specific crises have influenced the composition of the ruling coalition, the holding power of its factions and the strategic use of resources to maintain its power. The paper concludes that Tanzania’s ruling coalition is presently characterised by conflicts and bargaining among strong factional elites within the ruling coalition and by the increasing power of its lower level factions. Opposition parties are largely excluded from influence and remain weak. Economic entrepreneurs in the formal productive sectors are few and poorly organised. Their relations with the ruling coalition are ambiguous and largely informal, although exchanges of money and rents are of increasing importance in the relationship. Moreover, informal sector entrepreneurs and smallholders in agriculture are largely excluded from the ruling coalition. There is little evidence that the ruling coalition – despite decades of political stabil- ity – has used its position to build and strengthen the productive capacity of domestic entrepreneurs. 7 DIIS WORKING PAPER 2012:06 8 DIIS WORKING PAPER 2012:06 1. INTRODUCTION spite impressive economic growth over the past fifteen years (Nord et al. 2009, Figure The present ruling party in Tanzania, the 1). Furthermore, Tanzania’s headcount pov- CCM (and its predecessor, TANU), has been erty declined by only 2.4 percentage points in power since the country’s independence in between 1991 and 2007, compared, for ex- 1961, longer than any other political party on ample, to more than 20 percentage points in the continent (Smith 2005, table 1). Moreo- Ghana and Uganda (Hoogeveen and Ruhin- ver, the key features of Tanzania’s ruling duka 2009, 2; Treichel 2005, 17). The actual coalition until the early 1990s were ‘close to number of poor people is, in fact, increasing that of a developmental state’ (Khan 2010, yearly (Hoogeveen and Ruhinduka, 2009, 64), 120). Groups that could potentially threaten although there may have been advances in the power of the ruling coalition were almost other aspects of peoples’ lives (such as educa- non-existent, while internal lower-level fac- tion and health). Yet,
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